What ROAS means
ROAS is return on ad spend: the sales your ads bring in, divided by what you spent on them. A ROAS of 5 means every ₱1 of ads brought ₱5 of sales.
ROAS = sales from ads ÷ ad spend
A high ROAS isn't automatically good. What matters is whether it's above your break-even ROAS: the point where the ad cost per order eats exactly the profit that order makes. That point depends on your fees and product cost, so it's different for every product.
- Break-even ROAS = sale value ÷ profit per order before ads.
- Target ROAS = sale value ÷ (profit before ads − the margin you want to keep).
- ACoS (ad cost of sales) is the same idea the other way round: ad spend ÷ sales, or 1 ÷ ROAS. A ROAS of 4 is an ACoS of 25%.
TikTok's GMV Max ads show this as ROI. It means the same thing: sales ÷ ad spend.
A worked example
A Shopee Marketplace seller sells a ₱499 item that costs ₱250, with ₱15 of packaging. Shopee's fees on the order are ₱94.02, which leaves ₱139.98 of profit before ads.
| Break-even ROAS | ₱499 ÷ ₱139.98 = 3.56× |
| Most ad cost per order to break even | ₱139.98 (ACoS 28.1%) |
| ROAS for a 10% margin | ₱499 ÷ (₱139.98 − ₱49.90) = 5.54× |
| Most ad cost per order for a 10% margin | ₱90.08 (ACoS 18.1%) |
At a ROAS of 3 the seller loses ₱26.35 on every order from ads. At 4 they make ₱15.23. At 8 they make ₱77.60. So a campaign showing "3× ROAS" looks fine in the ads dashboard, but on this product it loses money.
Tips for running ads profitably
- Track ROAS per product, not per shop. A shop-wide ROAS of 6 can hide one product at 2 that loses money on every sale. Check each product against its own break-even.
- Set your bid or target from the break-even. Platforms that let you set a target ROAS should get at least your break-even, ideally your target ROAS.
- Remember the orders you'd get anyway. Some ad sales would have happened without ads. If your ROAS sits just above break-even, the ads may not be adding much.
- Include programs and vouchers. Free shipping programs, vouchers and affiliate commission all lower your profit before ads, which raises your break-even ROAS. Save your real rates in the fee calculators so this page uses them.
- Look at the month too. Ads also need to cover rent, staff and returns. The monthly profit calculator shows break-even ROAS for the whole month.
Frequently asked questions
What is a good ROAS on Shopee or Lazada?
There's no single number. A good ROAS is one above your break-even ROAS, which depends on your price, product cost and fees. A product with a thin margin may need a ROAS of 8 or more, while one with a wide margin can profit at 3.
How do I calculate break-even ROAS?
Divide the sale value of one order by the profit that order makes before ads. If a ₱499 order leaves ₱139.98 after fees and costs, break-even ROAS is ₱499 ÷ ₱139.98 = 3.56. Below that, ads cost more than the order earns.
What's the difference between ROAS and ACoS?
They're two views of the same thing. ROAS is sales ÷ ad spend. ACoS is ad spend ÷ sales, shown as a percentage. A ROAS of 5 is an ACoS of 20%.
Is TikTok's ROI the same as ROAS?
Yes. In GMV Max and some other TikTok ad tools, ROI is gross sales from ads divided by ad spend, which is what everyone else calls ROAS. Compare it with the break-even ROAS here.
Why does my break-even ROAS change by category?
Commission and growth fees depend on category, so the profit left before ads changes too. Less profit before ads means a higher break-even ROAS. Pick your category above for the right fees.